Our team recently conducted a meta-analysis of EBITDA multiples for small-to-midsized private businesses of <$250M in revenue, parsing the data by industry and company size. We drew from research published over the past 2 years (Q2 2021-Q1 2023) in M&A and private equity publications. The tables below reflect an accurate picture of private company valuations in today’s M&A environment.
Apart from industry and EBITDA range, real-world valuations depend principally on 8 factors:
- Recurring revenue
- Revenue growth over last 12 months
- Key employee turnover
- Profit margin
- Competitive advantages
- Customer concentration
- Strength of management team
- Growth opportunities
The following tables represent EBITDA multiple averages; achieving these multiples depends on an acquirer or investor’s weighting of the above factors, as well as the business’ strategic fit with the acquirer or portfolio.
|NOTE: If you’re exploring selling your business, see our report on the Top M&A Advisory Firms in the US.|
To make the data more meaningful, we’ve broken it down by two further dimensions: revenue growth in the last 12 months and key employee turnover. In addition to EBITDA range and recurring revenue, these tend to be the strongest considerations for acquirers when they’re evaluating a company. Definitions of “high” and “low” in the two categories vary based on acquirer and company size, but a healthy median for last 12 months revenue growth is ~25% and key employee turnover rate is ~5%.
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